Papa John’s Creative Approach To Out-of-Stocks

Written by Evan Schuman
October 9th, 2008

It’s 9 PM on a Saturday and Bill hits the E-Commerce site of his local pizza parlor to order a pie with pineapple and anchovy toppings. The site knows his favorite orders, and his payment data and his order are quickly processed. Then it flashes a message that they just ran out of pineapple and asks would he care for an alternative topping?

With the new Web site that $1 billion Papa John’s launched this week, restaurant workers update the site with topping out-of-stocks by calling a headquarters’ call center, which sends a message to have the site updated for that specific restaurant. But the chain is preparing for a much faster system, where employees at each store could tell its POS system about running out of pineapple as easily as ringing up a cheesesteak to go.

In the world of retail, restaurants—and especially pizza chains—have unusual challenges. Take out-of-stocks, for instance. That traditionally refers to a completed item, such as running out of red bicycles when the last of 70 in stock are sold. POS can talk with inventory and know how many items are in stock and can assume an out-of-stock when the last one is sold.

But in a pizza chain, pepperoni and sausage and other toppings are not wrung up individually, other than as a topping. Theoretically, the POS could assume strict measurement adherence, knowing that the storeroom has 100 pounds of pineapple and that that is enough for maybe 1,000 pineapple pizzas. Things are rarely that precise, with some workers throwing on more or less, and then there are the pepperoni slices that fall on the floor.

The only accurate way to work out such a system would be to allow workers to key in such shortages when they happen.

Tish Muldoon, the chain’s PR director, stressed that her chain rarely runs out of such topping, but that the technology could prove useful.

Pizza chains are also different from other E-tail sites that allow deliveries in the time urgency. What other retailer would concede that a 90-minute delivery of a fully customized product from mouse click to doorbell ring was far too lengthy?

With that time urgency, the ability to have an absolutely current menu display is challenging.

Bob Ford is the director of online marketing for the chain of 3,270 restaurants in 50 U.S. states and 28 countries, which dubs itself the world’s third largest pizza company, presumably behind Pizza Hut and Domino’s.

Ford, who oversaw a major relaunch of the chain’s E-Commerce site this week, said that his team "has provisions in place" for connecting the E-Commerce site directly with the homegrown POS units in each store. But it won’t be until a future rev of the site.

The key changes for this version is moving menus to appear before any logins are requested. "I don’t want to tell you who I am. I just want the menu," Ford said.

But for Papa John’s, that’s not so easy. The chain makes extensive use of regional preferences, offering, for example, black olives in much of the country but green olives in Texas, Muldoon said. Almost 10 percent of the regional menus are localized, making it unadvisable to show a California consumer a menu with items that can only be purchased in Florida.

Papa John’s created a generic menu, but then asks for address and Zip Code to display the full menu for the nearest restaurant. The very next release of the site—slated for "before the end of the year"—will include an improved restaurant locator, Ford said.

The site also updated its mobile and desktop interfaces, reflecting the capabilities and screen sizes of the more popular mobile/desktop options out there today. "Many sites were designed for 800 x 600 screen monitors," Ford said, "but 95 percent plus now have 1024 x 768" or better.

One observation that Ford mentioned is consumer perception of speed with ordering online versus ordering on the phone. "The perception is that online is faster, but the reality is that it’s self-paced so it feels better to you" compared with a phone order.

Maybe, but it’s quite likely that the E-Commerce transactions are indeed a lot faster. First, there’s the self-selecting factor, meaning that the consumer who chooses to order online is likely very comfortable with computers and would therefore likely be very fast at order entering. Also, after the first order, if consumers order a favorite package and if they allow their payment card information to be retained, that online order truly should be a lot faster.

That’s even more likely during busy pizza hours when the store is more likely to have to put phone customers on hold. On the flip side, a phone order rarely crashes and requires a reboot, nor do multiple orders display an eternal hourglass. But even with Windows, being placed on hold is probably more likely.


4 Comments | Read Papa John’s Creative Approach To Out-of-Stocks

  1. Liz Says:

    Did they consider tying the default menu to IP address then confirming or switching when someone logs in? That might get them a lot closer to the immediately personalized content that would work for them.

  2. don Says:

    having been in the pizza business for 4 decades, i think it is a better use of time to hire people who are not so stupid that they run out of toppings.

  3. Evan Schuman Says:

    Editor’s Note: We asked about that during the interview. They had opted to not go that route but it was apparently considered.

  4. don Says:

    To eliminate

    1 – many toppings, like pineappple mentioned in the article, come in cans or jars with shelf life of 6 months – keep a day/s worth in a back corner, and rotate it with new product every first of the month. other toppings are frozen (use the same idea as above, but bi weekly, storing in a small freezer for that purpose), or refrigerated, with weeks of shelf life – so always keep an extra day/s on hand.

    2 – many toppings, like pineapple mentioned in the article, are nonproprietary and available at grocery stores (many of the large chains use Dole pineapple tidbits), especially fresh produce – send an employee to the grocery store BEFORE you run out

    3 – attitude and committment to your customers – never think for one second, and profess to all employees, that there is no option of ‘we are out’.

    My friend, Stew Leonard, has a sign in front of his dairy store
    Rule #1 – the customer is always right
    Rule #2 – if you think the customer is wrong, read Rule #1

    Same applies here
    Rule #1 – we will never run out of product
    Rule #2 – if you think it can happen, or if you think that would be OK, read Rule #1

    Don Vlcek
    VP Marco’s Franchising LLC
    Toledo, OH


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